Your net worth is essentially a snapshot of your overall financial health. It is not necessarily the most important factor in understanding your finances, but it can help identify areas for improvement. To calculate your net worth, sum up the value of your assets, including cash, investments, and home equity, and then subtract any debts or other liabilities such as credit card debt or student loans. A positive net worth indicates you own more than you owe, whereas a negative net worth signifies significant debt.

Everyone progresses through life at their own pace, so your net worth might differ substantially from others in your age bracket, and that is perfectly okay. While it is ideal to compare yourself only to your past financial progress, sometimes it is insightful to see how you measure up against the average. As per the comprehensive 2022 Survey of Consumer Finances by the Federal Reserve, U.S. adults' average and median net worth differ significantly across age groups due to outliers skewing the average.

For adults aged 45 to 54, the average net worth is about $971,000, whereas the median is around $247,000. The median often gives a more accurate depiction of a typical household, as it splits the population in half, with 50% having a net worth above and 50% below this figure. Here’s a perspective on net worth by age: for younger adults under 35, the average and median net worths are $183,000 and $39,000, respectively; for ages 35 to 44, those numbers rise to $548,000 and $135,000.

For a broader understanding beyond age, consider the distribution of net worth across all households. Those in the top 10% boast an average net worth of around $7.8 million, while the middle-to-upper range sits between $300,000 and $400,000. Notably, within the 90-100 percentile, the average is $7,771,000 with a median of $3,795,000. If your net worth does not align with peers, that is not inherently negative. Crucially, track your financial progress to increase assets and reduce debts over time.

Investing in the stock market is a popular way to boost your net worth, as demonstrated by investing $300 monthly in an index fund with an 8% average annual return, approximating historical market performance. Depending on the duration of investment, one could accumulate over $600,000 in 35 years. A portfolio consisting of individual stocks may offer higher returns, but balancing risk with reward is crucial. Stocks promising long-term growth potential are valuable, minimizing risk.

Evaluate a company's financial health and competitive stance to guide quality investments. Moreover, investing in the stock market can take various forms, from purchasing individual stocks and index funds to contributing to a 401(k) or IRA. All these avenues can significantly enhance your wealth over time, sometimes by several hundred thousands of dollars. While no single metric dictates your financial health, estimating your net worth offers a swift assessment of your status.

If your goal is to bolster your net worth, investing in the stock market is among the most robust strategies available.